Introduction
The United Nations Convention on Contracts for the International Sale of Goods (“CISG”) regulates the formation of contracts under Part II, Articles 14 to 24. Articles 11, 13 and 29 also provide insight for formation of contracts. In general terms, with regard to contract formation, the CISG adopted the ‘traditional’ concept of contractual obligations, similar to Turkish and Swiss Law of Obligation principles. Both Turkish and Swiss laws provide that contracts shall be formed as a result of two declarations of intent - offer and acceptance.
In the doctrine it is accepted that in cases where complex negotiation processes have taken place, and where it is difficult to distinguish between offer and acceptance, substantive consensus can generate solutions, and the CISG will establish the scope of application[2].
Withdrawal and Revocation of the Offer
In order for an offer to be withdrawn, Article 15 states that the withdrawal should reach the offeree before or at the same time as the offer. It should be noted that revocation and withdrawal are distinct terms from each other, having different meanings under the CISG.
Revocation of an offer is regulated under Article 16 of the CISG. An offer is revocable when it reaches the offeree before the acceptance is dispatched. In some instances, the offer cannot be revoked if there is a fixed time, or it has been established that it is not irrevocable, and if the offeree relies on the offer and has acted in reliance thereof, the offer cannot be revoked.
Rejection of an Offer
Rejection of an offer is stipulated under Article 17; accordingly, a rejection must reach the offeror in order to terminate an offer, even if the offer is irrevocable.
Acceptance
Acceptance is regulated under Articles 18 to 22 in line with the Turkish and Swiss laws of obligation provisions. An acceptance can be made as a statement or by other conduct. It is important to note that silence or inactivity is not considered as an acceptance under Article 18. As is indicated, above, Article 8 and 9 play an important role when interpreting offers and acceptances. In cases where any usage or practices agreed upon between the parties suggest otherwise, silence or inactivity can also be interpreted differently.
Effectiveness of the Acceptance
An acceptance is effective when it reaches the offeror. If an oral offer is in question, it should be accepted immediately, unless circumstances imply otherwise. In some instances, there is a fixed time within which to accept the offer. Pursuant to Article 20, for those periods that are stated in a letter or a telegram, the time begins to run when the telegram is handed over for dispatch, or the date indicated in the letter, or if not so stated, the date shown on the envelope. Official holidays and non-business days are included in this period. Only if the last day of the fixed period is an official holiday or a non-business day the period shall be extended to the first business day. If such a fixed time is not regulated, then the acceptance shall be made within a reasonable time. A late acceptance is not effective unless an oral statement or notification is made to the offeree.
In order for a contract to be formed under the CISG, Article 23, an acceptance to an offer should become effective. Once the contract is formed, all of the following engagements can only be interpreted as amendments to the offer.
Counter-offer
A Counter- offer is regarded as a rejection of the offer when it includes additions limitations and modification. However acceptance, which is intended to be a reply to an offer, includes additions, modifications, or limitations, which do not materially effect the terms of the offer is considered to be an acceptance unless the offeror objects thereto otherwise, orally, or through a notification. Factors that can materially effect the terms of an offer are listed under Article 19, subsection 3, and are the price, payment, quality, quantity of the goods, place and time of delivery, extent of one party’s liability to the other, or the settlement of disputes.
Conclusion
In order to validly form a contract under the CISG, there has to be two declarations of intent - acceptance and offer. This traditional approach is parallel to Swiss and Turkish laws of obligations. The offeror should have a definite proposal and the intention to be bound by that proposal. The offeree, on the other hand, can accept the offer by a statement, or through its conduct. Both Articles 8 and 9 play an important role while interpreting an offer and acceptance. It should be emphasized that when formation is interpreted, the CISG should be considered as a whole.
